MEDNAX, Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by MEDNAX, Inc. managers to do a situational analysis of the organization . It is a handy technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) MEDNAX, Inc. is facing in its current business environment.

The MEDNAX, Inc. is one of the leading organizatations in its industry. MEDNAX, Inc. maintains its prominent position in market by carefully analyzing and reviewing the SWOT analysis. SWOT analysis a highly interactive process and requires effective coordination among various departments within the company such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework enables an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the MEDNAX, Inc. to develop four types of strategies:

SO (strengths-opportunities) Strategies

WO (weaknesses-opportunities) Strategies

ST (strengths-threats) Strategies

WT (weaknesses-threats) Strategies

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that an organization can use to exploit external opportunities, counter threats, and build on & protect MEDNAX, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to MEDNAX, Inc. SWOT Analysis

Strengths of MEDNAX, Inc. – Internal Strategic Factors

As one of the leading firms in its industry, MEDNAX, Inc. has numerous strengths that enable it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of MEDNAX, Inc. are –

Good Returns on Capital Expenditure – MEDNAX, Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.

Strong Brand Portfolio – Over the years MEDNAX, Inc. has invested in building a strong brand portfolio. The SWOT analysis of MEDNAX, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.

Successful track record of developing new products – product innovation.

Strong Free Cash Flow – MEDNAX, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.

Strong distribution network – Over the years MEDNAX, Inc. has built a reliable distribution network that can reach majority of its potential market.

Highly skilled workforce through successful training and learning programs. MEDNAX, Inc. is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.

Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.

Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.

Weakness of MEDNAX, Inc. – Internal Strategic Factors

Weakness are the areas where MEDNAX, Inc. can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.

The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.

Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that MEDNAX, Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.

Not highly successful at integrating firms with different work culture. As mentioned earlier even though MEDNAX, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. MEDNAX, Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.

Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, MEDNAX, Inc. needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.

Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of MEDNAX, Inc.

Opportunities for MEDNAX, Inc. – External Strategic Factors

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Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.

The market development will lead to dilution of competitor’s advantage and enable MEDNAX, Inc. to increase its competitiveness compare to the other competitors.

The new technology provides an opportunity to MEDNAX, Inc. to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.

Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided MEDNAX, Inc. an opportunity to enter a new emerging market.

New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for MEDNAX, Inc. to drive home its advantage in new technology and gain market share in the new product category.

Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for MEDNAX, Inc. to capture new customers and increase its market share.

New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for MEDNAX, Inc.. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.

Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for MEDNAX, Inc. in other product categories.

Threats MEDNAX, Inc. Facing - External Strategic Factors

The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.

Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.

Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for MEDNAX, Inc. in those markets.

No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.

Imitation of the counterfeit and low quality product is also a threat to MEDNAX, Inc.’s product especially in the emerging markets and low income markets.

Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.

Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.

The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.

Limitations of SWOT Analysis for MEDNAX, Inc.

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the
major limitations of SWOT analysis
. For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.

SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.

The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of MEDNAX, Inc.

SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.

SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

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Weighted SWOT Analysis of MEDNAX, Inc.

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis MEDNAX, Inc. managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of MEDNAX, Inc.

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.